Morgan Stanley's Ruchir Sharma: Prospects of #Pakistan’s #economy "VERY GOOD" & #India's "GOOD"
http://tns.thenews.com.pk/pakistans-economy-ready-takeoff/ … via @TheNewsonSunday
Closer to home, he has clubbed four nations of South Asia — Pakistan, Bangladesh, India and Sri Lanka. In general the future outlook for South Asia holds ‘Good’ and for Pakistan it looks ‘Very Good’. I started jumping on the couch after reading the outlook for Pakistan and for the rest of the time I was reading the book I was only interested as to what the future outlook holds for Pakistan in the eyes of most influential investor and thinker. But then the author has added a caution and it’s damn important that we read and comprehend this fine print in detail.
Pakistan’s economy is taking off and the future outlook till 2020 has been termed ‘Very Good’. The rationale used in building this argument is that our working age population is growing and that’s a very good sign for the economy. Inflation is under control which is increasing in the vicinity of 3 per cent but on the other hand GDP is growing at 4.5 per cent. Contrary to the populist demagogy, our debt level is pretty low in relation to comparative economies whereby debt to GDP is at 65 per cent. We have a decent manufacturing base with export economy and we are also investing in factories by opening industrial parks as elucidated in the China-Pakistan Economic Corridor (CPEC).
Our trade deficit is on the decline as our import bill is on the wane, thanks to lower oil prices in the international market. We are also not exporting commodities whose prices are plummeting in the international market. We would be getting a shot in the arm once the CPEC starts rolling out as China has committed to invest US$ 46 billion in infrastructure and power related projects in Pakistan over the next 20 years.
Sharma says that even if 50 per cent of this commitment materializes, it would be enough to provide us with the necessary infrastructure that will take us from a low-income to a middle-income country during the next five years.
Though hard to digest, the most influential writer and investor says that we don’t have stale leadership like Vladimir Putin of Russia and Recep Tayyip Erdogan of Turkey who have clung to power for more than a decade and are in their fourth terms. But then Nawaz Sharif is in his third term too.
A very important point the author highlights is that for a coup-prone country like ours, the military finally seems to have decided to concentrate on ensuring the internal as well as external security while staying clear of politics.